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Who's Reading the Paper?

Publishers who attended the Newspaper Association of America's
annual conference in Toronto this past April had little to cheer
about. The dot-com-bred boom in advertising dollars had already
dried up, leaving industry executives to face once again the
realities of the unforgiving media business, where newspapers
compete with magazines, television, radio, and the Internet for
ever-limited ad dollars. And if the advertising drought wasn't
enough, executives also had to face up to the longer-term problem:
declining circulation.

Yet, amid the consternation and hand wringing, there was a
bright moment at the conference, served up by John Lavine, a
Northwestern University professor who runs the Readership
Institute. The reason for the flash of bliss: Lavine found that a
full 85 percent of all Americans read a newspaper in a given
week.

This is big news about where people get their news. Forget for a
moment that the newspaper industry paid Lavine to conduct the
study, which included interviews with 37,000 people in 100
newspaper markets. Greater competition from rival advertising
media, coupled with a steady drop in the percentage of Americans
who subscribe to papers, has newspaper executives scrambling for
ways to show that they still qualify as a viable advertising
vehicle. Over the past decade, the industry has consolidated,
modernized operations, and even adjusted editorial content in an
effort to boost circulation for advertisers. Nonetheless, today it
still finds itself struggling to attract readers. Total morning and
evening newspaper circulation has hovered around 60 million since
1960, despite increases in the population and improvement in
education levels. (See chart, right.)

In its latest attempt to demonstrate its own vitality, the
industry has embarked on an effort to modernize the metrics that
gauge newspaper performance. The idea: By understanding the
demographics of readers â€” what they read and which coupons
they clip â€” editors and publishers could serve them better by
tailoring content and advertising. In fact, many believe that the
readership movement is absolutely critical to the future success of
the industry. â€œThe more a newspaper knows about its readers,
the better that paper will be able to showcase its advantages to
potential advertisers,â€? says Dr. Randal Beam, an expert in
readership who teaches journalism at Indiana University.

This realization, that readership could improve the bottom line
even without a change in circulation, was what shifted the
readership movement into full gear. The NAA has spent the past two
years in hot pursuit of the readership goal. First it approached
the Audit Bureau of Circulation (ABC), which is the nonprofit body
that since 1914 has certified circulation numbers on behalf of
advertisers. â€œThe newspapers came to us,â€? says Mark
Wachowicz, senior vice president at the ABC. In response, he says,
the ABC launched the Reader Profile Service, an audit that is
tacked on to the regular circulation reports that publishers
already routinely file. Around the same time, the newspaper
publishing industry commissioned the study from Lavine at the
Readership Institute.

Lavine's report of newspaper readership, called â€œThe
Impact Study,â€? isn't even fully complete, yet industry
executives are already greeting it with big wet kisses. Tim
McGuire, editor of the Minneapolis Star Tribune and
incoming president of the American Society of Newspaper Editors,
calls the study the most exciting research he's seen in his 30-year
career.

Why is McGuire so animated? Among Lavine's preliminary findings
from the 37,000 people he polled: Readers like the content and they
like the advertising. Ads are not just visual distractions from
efficient reading. Think of this as the Super Bowl advertising
effect, when many people turn on the big game but ignore the
football. The Impact Study has found that the Super Bowl effect
occurs on a smaller scale at the breakfast table every morning.
Publishers have known this â€” people looking for jobs, used
cars, and apartments buy the Sunday paper for the classifieds. But
the publishers have not actively harnessed this readership-courting
strategy throughout the paper. â€œIf you have categories of
advertising that appeal to certain segments of readers, they not
only cause those readers to read that advertising, but the overall
newspaper,â€? says Lavine.

What's more, certain kinds of stories drive readership more than
others. (See chart, below.) The class of news and information with
the greatest potential to increase readership is local news and
announcements, particularly of a people-oriented type. Next on the
popularity list: lifestyle news, concerning health, home, food,
fashion, and travel. Interestingly, sports came in at the bottom of
the list â€” contradicting the old rule of thumb that beefed up
sports coverage increases readership.

The Readership Institute will eventually provide demographic
data in tandem with each recommendation it makes. Right now it has
only categorized the audience based on reading habits. The 85
percent of those surveyed who read some paper every week include 75
percent who read the target local paper (the one in their sample)
or another local paper, and an additional 10 percent who read a
nonlocal paper. Of those who read the paper, 23 percent are heavy
readers, 11 percent skim it, while only 3 percent read just the
weekday papers. (See chart, page 34.)

While publishers have embraced the study, advertisers are
reserving judgment for now. â€œIt's a compelling study,â€?
says Matthew Spahn, director of media planning and analysis for
Sears Roebuck & Co. â€œBut I'd like to verify the
data.â€?

Spahn and his colleagues may be holding out for results from an
impartial source: the ABC. Unfortunately, the organization doesn't
have enough data yet to report any significant findings. Unlike the
ABC's circulation reports, the readership audit is voluntary and
few papers have bothered to fill it out. The adoption rate â€”
only 125 newspapers out of 1,500 opted to complete the Reader
Survey so far â€” has disappointed many on both sides of the
advertising table, who sat patiently for two years, ready to pounce
on the numbers with their data hounds and spreadsheet applications.
Instead, they have a jumble of inconclusive data and no analysis or
recommendations.

Granted, some newspapers have filed the readership audits. But
advertisers seek a critical mass of data, so that they may compare
and contrast papers in the same markets, and between markets.
Adding to the problem of achieving national comparability, the ABC
hasn't yet invested in the tools and products that it offers for
its circulation audit â€” including CD-ROMs and online planning
tools. It plans to do so once more papers file. The industry is
dragging its collective feet â€” perhaps afraid of what it may
find out about its readers. However, few doubt that when a
sufficient number of papers finally do fill out the survey, there
will be ample demographic information to build marketing plans
around, including the sex, age, education, household income,
marital status, and ethnic breakdown of each newspaper's
readers.

Clearly, circulation numbers will never disappear. Big retailers
will always need to schedule pre-prints. But additional information
about readers will help advertisers drill down below the surface,
as they currently do for television (Nielsens), magazines (MRI),
radio (Arbitron), and the Internet (various competing audience
measurement firms). One can think of readership as a clever crib
from the Maple Leaf playbook. Advertisers in Canada have used
reader demographics data from the National Audience Data Bank
(NADBank) for almost 20 years. NADBank tracks retail shopping
habits, product usage, leisure activities, and other media usage,
according to its executive director, Anne Ruta. It then offers
advertisers the opportunity to crunch through the data, using
CD-ROMs and analysis software. Want to reach seniors in
Saskatchewan? NADBank will show you the way. The result, at least
anecdotally, has been positive. â€œCanadian newspapers have a
greater share of all advertising revenues than American ones
do,â€? says Len Kubas, a Toronto-based newspaper
consultant.

Against the backdrop of worries that other mediums will outpace
newspapers by knowing their consumers better, one truth remains
that will guarantee the dailies' survival â€” regardless of
whether the readership movement pans out. As consultant John Morton
says: â€œFalling TV viewership plus the fragmentation of
television and other media has left newspapers in the enviable
position of being the last remaining mass medium. Each household
might get 60 or 80 TV channels, a half-dozen magazines, and only
one newspaper.â€?

Newspapers are not risking extinction â€” only modernization
â€” by refusing to take the final steps toward gathering
audience demographic information.

FLAT LINING

Circulation has not risen above 60 million in more than 40
years.

Source: Newspaper Association of America

POP TOPICS

Some beats drive readership more than others. Here is a
listing of news subjects from most to least popular.

Intensely local, people-focused news

Lifestyle news

How we are governed and global relations

Natural disasters and accidents

Movies, television, and weather

Business, economics, and personal finance

Science, technology, and environment

Police, crime, and the judicial system

Sports

Source: Readership Institute

NEWS NUMBERS

Newspapers receive 22% of all ad spending, more than any other
single advertising category. Their readers include a diverse group
of consumers, but only 23% are considered heavy readers.